The Nuclear Option

Russia’s state nuclear corporation claims it is immune to political pressures. But Rosatom has played a passive and active role in an increasing number of global battles for influence, and that might just be the start.

At the height of the conflict in Ukraine and the annexation of Crimea, as tensions with Europe bubbled dangerously close to the surface, a major energy crisis emerged: Ukraine and other parts of Europe are very much dependent upon Russia for oil and gas, and there were serious concerns over disruptions to that energy supply.

Moscow’s gas and oil exporting firms jockeyed for the spotlight in an expanding political drama. But the state nuclear corporation, Rosatom, took the opportunity to reassure the world market it steers clear of politics.

“Nuclear should be out of all political discussions, all temporary disagreements, because it is a very sensitive area and first and foremost it is all about safety,” Kirill Komarov, the deputy director general, told Reuters news agency.

The company has long touted its reputation as a neutral player. Executives point to Rosatom’s global customer base and expanding network of “memoranda of understanding” – primarily symbolic agreements the state can use to preserve its place within an emerging energy market and reinforce the perception of Russia as a global power.

Yet these professions of non-partisanship have begun to ring hollow. Western policymakers and experts continue to underappreciate and underestimate the role of nuclear energy in the Russian foreign policy toolkit. Rosatom is increasingly asserting its economic clout in pursuit of the Kremlin’s geopolitical interests – both in hard and soft power.

Calculated Responses

In late 2007, Russia and Iran were locked in negotiations over Iran’s nuclear program. By shipping fuel to Iran’s Bushehr power plant, Moscow sought to halt enrichment of uranium and bolster its image as a responsible international player ready to shoulder its share of the global governance burden. The Kremlin would benefit by succeeding where the United States had failed.

Yet diplomatic efforts broke down and Tehran refused to provide assurances that enrichment would be halted, so Rosatom suspended its deliveries. The official explanation – widely dismissed by Russia watchers – was that Iranian authorities had failed to pay. In reality, such indiscretions were relatively common, making the timing of Moscow’s drastic move somewhat suspicious.

Almost a decade later, the same situation arose in Ukraine – twice. Following the 2014 Ukrainian Revolution, the Kremlin announced an embargo on the transit of fuel through Ukraine, citing the “unstable situation” as an unacceptable level of risk. With its reactors running dry, the Ukrainian government was faced with disaster on a colossal scale. Rosatom’s chief, Sergei Kiriyenko, ostensibly refused to comply with the Kremlin’s wishes, yet two years later, Rosatom’s subsidiary responsible for the fuel cycle, TVEL, announced it would no longer import spent fuel rods from Ukraine due to non-payment. Lacking appropriate disposal methods, the fuel rods were stored in precarious makeshift shelters.

All this occurred, of course, as conflict raged in eastern Ukraine. Gazprom continued to offer relatively discounted prices to its Ukrainian customers, exercising what Adam Stulberg calls “strategic restraint” – and continuing a trend of relative leniency which made Rosatom’s assertiveness all the more puzzling.

Turkey has also found itself as the object of Rosatom’s displeasure, having downed a Russian SU-24M jet in disputed circumstances. Russia imposed an array of economic sanctions in retaliation, and Rosatom halted work on Akkuyu, Turkey’s first nuclear power plant. Akkuyu was not officially part of the sanctions package, but progress returned to normal after Turkish President Recep Tayyip Erdoğan issued a formal apology for the incident.

Soft and Hard Power

Coercion aside, nuclear energy has also been an effective tool of Russian soft power. The corporation builds, owns, operates, and occasionally transports a power plant to clients, reducing initial costs significantly and giving it a uniquely broad potential market. In this sense, Rosatom is a highly efficacious vehicle for Russian global influence, making excellent use of Russia’s comparative advantage over the West in the nuclear sector.

The “memorandum of understanding” is the central tool in this soft-power push. Such documents are signed between Rosatom and governments, competitors, and state agencies alike. Despite lacking legal force, a memorandum provides a public roadmap for areas of future cooperation: education and training programs on nuclear energy are announced and joint working groups are founded. If memoranda agreements fail to yield results, Rosatom has nonetheless helped construct an image of Russia as a global power. Such agreements play well to the domestic audience, too.

There is another, more practical, reason for these documents. Nuclear technology is generally not cross-compatible: Russian models cannot use American or French fuel without an element of risk. By training local engineers to use its reactors, Rosatom will have created a degree of path dependency. If Sudan is to invest in nuclear energy in the future, for example, its previous experience with Russian technology will likely influence its choice of partner company. Unlike natural gas or oil, nuclear energy provides a guaranteed source of influence that cannot be blocked off like a pipeline. The construction of a nuclear power plant creates a deeply asymmetrical relationship. The Memorandum of Understanding can also be a cost-efficient way of securing future deals.

The Paradox of Rosatom

The Kremlin has shown it does not respond well to perceived disrespect. By announcing that nuclear enrichment would not stop, Tehran undermined the work and status of Russian diplomats, for example. In Moscow’s view, the overthrow of President Yanukovych in Ukraine represented an unacceptable incursion by Western forces into the Russian sphere of influence.

And yet, Russia’s foreign policy establishment prides itself on its pragmatism. A realist world view dictates that perceptions of respect should not hold sway in the decision-making processes. Therein lies the paradox of Rosatom: the corporation is co-opted for geopolitical gain when Russia’s great power status is disrespected. This nebulous concept is difficult to reconcile with the realpolitik that often drives Russian policy.

The combination of pragmatism and idealism is a well-trodden path for Russian actors in international affairs. Just like Gazprom, Rosatom has shown an ability both to cooperate and coerce. By combining tangible goals with the soft-power offensive led by the memoranda of understanding, the corporation has demonstrated three of the most pertinent concepts to have characterized Russia’s international engagement in the last decade: pragmatism, speed of response, and zero-sum thinking.

The weaponization of Rosatom also allowed the Kremlin to avoid other, riskier methods of retaliation: another gas crisis in Ukraine would have angered Russia’s downstream energy customers, while open military conflict with Turkish forces would have trod dangerously close towards NATO’s Article V commitments. At the same time, Rosatom itself appears to be deployed in a restrained manner. The Akkuyu nuclear plant was not cancelled, but suspended; the corporation’s chief refused to suspend deliveries of fuel to Ukraine. It appears Moscow is unwilling to exceed the boundaries.

One thing seems to be clear: any component of the Russian state may be co-opted for political reasons. Even a corporation which argues fervently that it does not pursue political aims may be obliged to do so. If Russia views state-controlled assets as a potential weapon, it holds a vast array of policy tools at its disposal – and Rosatom may be the tip of the iceberg.

+++ Claire Demesmay and Jana Puglierin on the Franco-German tandem; Almut Möller on not losing time getting EU reforms going; Ralph Bollmann on Angela Merkel’s plan for the EU and the eurozone; Radoslaw Sikorski argues that Europe needs an economic revival and beefed-up defense; Daniel Vernet profiles Bruno Le Maire, France’s economy minister ("Close-Up"); Jörg Lau sketches out a new German foreign policy for uncertain times; Jan Techau demands greater ambition from Berlin; Thomas W. O’Donnell on the strange German reaction to the US Senate’s anti-Russian sanctions; Rino Soloveitchik on how Russian state media portray Germany and Europe; and much more +++

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